Suppose that on January 1 you have a balance of $3300 on a credit card whose APR

Question

Suppose that on January 1 you have a balance of $3300 on a credit card whose APR is 14%, which you want to pay off in 1 year. Assume that you make no additional charges to the card after January 1. a. Calculate your monthly payments. answer the nearest cent b. When the card is paid off, how much will you have paid since January 1? answer to nearest cent c. What percentage of your total payment from part (b) is interest? answer percentage out of 100 percent both answers will equal a total of 100 percent. a. The monthly payment is $ nothing. (Do not round until the final answer. Then round to the nearest cent as needed.)

Explanation / Answer

a) Monthly payment

= pmt(0.14/12, 1*12, 3300,0) [Excel Fromula]

= $ 296.30

b) Total money paid = $ 296.30 * 12 = $ 3555.57

c) Interest = $ 3555.57 - $ 3300 = $ 255.57

So,

Percentage of total payment as interest = 255.57 / 3555.57 * 100 = 7.19%

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